Wait-and-see sentiment prevails among Shanghai property buyers

BUYING momentum remained sluggish in Shanghai's new residential market for another week as tightening policies, coupled with a prevalent festive mood, kept potential home buyers sitting on the sideline.

The area of new homes sold, excluding government-subsidized affordable housing, dropped 22.4 percent from a week earlier to 116,000 square meters during the seven-day period ended on Sunday, Shanghai Centaline Property Consultants Co said in a report released today.

"The market seemed to have entered a 'frozen' period as the yearend is approaching with no single housing development managing to register weekly sales of more than 100 units, evidence for very lackluster sentiment among buyers," said Lu Wenxi, senior manager of research at Centaline.

The average cost of new homes, however, rose 22 percent week on week to 47,399 yuan (US$6,795) per square meter, Centaline data showed.

Citywide, a villa development in outlying Songjiang District became the most popular project last week after recording sales of 10,015 square meters, or 18 units, for an average price of 94,397 yuan per square meter. An apartment project in former Zhabei District, meanwhile, fetched sales of 17 units for an average price of 94,420 yuan per square meter, securing the last spot in the Top 10 list. All the remainder eight projects asked for no more than 50,000 yuan per square, Centaline data showed.

On the supply side, about 209,000 square meters of new houses, most of which costing less than 40,000 yuan per square meter and targeting first-time buyers and upgraders, were released locally, a week-over-week surge of 107 percent.

"Many developers now choose to launch their projects with an asking price that is equivalent to the previous batch," Lu said. "That pricing strategy, however, still seems not useful to boost sales as wait-and-see sentiment simply prevails in the market."